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Satyam blames investors, media
December 17, 2008 17:31 IST
Satyam [Get Quote] Computers on Wednesday criticised investors and media for blowing out of proportion the family ties between its chief and promoters of Maytas, and asserted there would be no issue with the government or regulator on corporate governance front.
"We have not violated any of the established regulations."The entire thing got blown out of proportion because the other party (target parties Maytas Properties and Maytas Infra) they being related to our director.
"Now it is more of a corporate governance issue projected by the investor community and the media. Whatever we have done, is well within the powers of the Board of Directors," NYSE listed Satyam CFO Srinivas Valdamani told PTI.
The company called off $1.6-billion deal to acquire Maytas Properties and Maytas Infrastructure, firms promoted by Satyam chief Ramalinga Raju's sons B Rama Raju and Teja Raju, after resistance from institutional investors.
The deal was touted as something that would help Satyam diversify its business, especially when there was slowdown in the IT business in key markets such as the US and Europe.
"We thought as long as we follow the right procedure and valuation model that would be a good corporate governance," Valdamani said.
Asked of the company is ready to face any questions from the market regulator and the government on corporate governance issue, he said: "From the government or regulator there will not be any issue. We have not violated any of the established regulations.
On Tuesday, corporate affairs minister P C Gupta had said: "But certainly if there is a violation of the Companies Act, we are going to look into it."
Valdamani said the buy-out was an unrelated diversification to hedge our business instead of being in one business.
"In terms of business case, we have done our valuation and business case evaluation and due diligence, but with the related-party manifestation with so much attention, that is where we underestimated a little bit.
Many companies balance sheet speak off related party transaction."
He said a top investment banker has done the valuation of Maytas Properties, which is not listed. He declined to give the name of the firm.
India's fourth largest IT company announced that it would buy Maytas Properties for $1.3 billion and a majority 51 per cent of Maytas Infrastructure for $0.3 billion.
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